Sub Saharan Management Consultants (Private) Limited v Sirutita Investments (Private) Limited and G. Dupwa and Messenger of Court

### Preamble
1
HH 249/12
HC 3873/12
10
---------




SUB SAHARAN MANAGEMENT CONSULTANTS P/L

versus

SIRUTITA INVESTMENTS (PVT) LTD

and

G. DUPWA

and

MESSENGER OF COURT

HIGH COURT OF ZIMBABWE

CHATUKUTA J

HARARE    6 June 2012

Urgent Chamber Application

Mr. S. Simango, for the applicant

Mr. B. Magogoe, for the 1st & 2nd respondents

CHATUKUTA J: This is an application for stay of execution of orders of the Magistrates Court in case No. 255/12 dated 9 and 23 February 2012.

The background to the application is that on 5 January 2012, the applicant filed an application seeking the ejectment of the respondents from No. 144 Nelson Mandela Avenue, Harare (the premises).  The applicant alleged in the application that it is in occupation of No 142/4 Nelson Mandela Avenue, Harare pursuant to a lease agreement with a company called Zeolite Investments (Pvt) Ltd dated 22 March 2011.  Prior to the conclusion of the lease agreement, the premises were being occupied by Bramhope Investments (Pvt) Limited (BHI Properties). The deponent to the founding affidavit to the present application and the 2nd respondents were directors in that company.   BHI Properties was dissolved and the applicant became the successor to the company.   The 2nd respondent assumed directorship of the 1st respondent and remained on the premises occupying Suite No144 without the applicant’s authority as the leaseholder.

The 1st and 2nd respondents did not oppose the application and default judgment was granted on 17 January 2012.  The respondents were served with a notice of eviction and were duly evicted from the premises.

On 8 February 2012, the 1st and 2nd respondents applied for an order restoring them into the property on an ex parte basis pending the determination of an application for the rescission of the default judgment.  The following order was granted on 9 February 2012:

“IT IS ORDERED THAT:

A rule nisi returnable on 17 (sic) day of Feb (sic) 2012 calling upon the Respondents to show cause why an order should not be made in the following terms:

TERMS OF THE FINAL ORDER SOUGHT

The applicants be and are hereby restored into occupation of Suite No 144 Nelson Mandela Avenue, Harare, pending the disposal of the respondents’ application for eviction in Case number 255/12.

Each party to bear its own costs.

PENDING THE RETURN DATE THE FOLLOWING BE AND IS HEREBY GRANTED:

INTERIM RELIEF

The applicants be and are hereby restored into occupation of Suite No 144 Nelson Mandela Avenue, Harare pending the finalization of application for rescission of judgment in case No 255/12.

The 1st respondent and all those claiming occupation through them be and are hereby ordered to vacate the property being Suite Number 144 Nelson Mandela Avenue, Harare pending the finalization of the application for rescission of judgment Case Number 255/12 (sic).

The 2nd respondent be and is hereby ordered to return applicants into occupation of suite Number 144 Nelson Mandela Avenue, Harare and into possession all (sic)the applicants’ property listed on its removal notice dated 2 February 2012 which it attached on that day.

Each party to bear its own costs.

In the event of the respondents breaching any of the terms of this provisional order, the messenger of court and if need be with the assistance of the Zimbabwe Republic Police, be and are hereby authorized to effect this order.”

The application for rescission of the default judgment of 17 January 2012 was granted on 23 February, 2012.

On 27 February 2012, the applicant appealed against the order for rescission on the basis that the Magistrates Court had grossly erred in rescinding the default judgment where the respondents were in wilful default.  It appealed, at the same time, against the order of 9 February 2012 on the basis that the order provided for the restoration of the respondents into the premises on an ex parte basis when the respondents had been lawfully evicted pursuant to a lawful order.

The 1st and 2nd respondents filed an application for leave to execute pending the appeal by the applicant.  On 16 March 2012, the Magistrates Court ruled that its order (presumably of 23 February 2012) was interlocutory and therefore there was no appeal before the High Court.     On 19 March 2012, the applicant appealed yet again against this decision.   The ground of appeal was that the notice of appeal was valid by virtue of s 39 (2) of the Magistrates Court Act [Chapter 7:10] which permits appeals against orders rescinding judgments made by the Magistrates Court.

Following the decision of 16 March 2012, the 1st and 2nd respondents obtained a writ of execution.   A notice of ejectment, for the ejectment of the applicant on 10 April 2012 was served on the applicants propelling the applicant to file this application.

The respondents contested the urgency of the application.  Mr. Magogoe submitted that the applicant was aware of the decisions in February 2012 and in March 2012 yet it did not seek the intervention of the court then.  Mr. Simango submitted that the noting on its appeals suspended the operation of the orders until the appeals were determined.   The applicant was surprised when the respondents proceeded to serve it with a notice for eviction to be carried out on 10 April 2012 despite the appeals.

I am inclined to agree with the applicant that the matter is urgent.  It is my view that the cause of action is not the order of rescission but the notice of removal served on the applicant.   Until the decision of 16 March 2012, the applicant was under the view that it had a valid appeal pending in the High Court.  It is therefore understandable that it considered it not necessary to approach this court for relief genuinely believing (whether rightly or wrongly) that the orders of 9 and 23 February had been suspended by the noting of the appeal.

The applicant again appealed against the decision of the lower court of 16 March 2012.  The respondents did not dispute that the decision of the court declaring the appeal a nullity was final in effect.   The applicant would therefore have been in the right to protect its occupancy by appealing against that decision. The applicant’s apprehension upon being served with a notice of eviction is therefore understandable under the circumstances.    It is that notice of ejectment that, in my view, gives rise to the need to act.  It is therefore my view that the matter is urgent.

Turning to the merits of the application, Mr. Simango submitted that there were two appeals pending against the judgments of the Magistrates Court.  If the appeals succeed after the judgment has been executed and the applicant has been ejected from the property, the applicant would suffer irreparable harm as it would not be able to be restored into the premises.  He submitted that the decision of 9 February 2012 was irregular in that it was made in the absence of the applicant following the eviction of the applicant in terms of a lawful order.  The lower court also erred on 16 March 2012 in declaring the appeal before the High Court a nullity when in fact the appeal was permitted in terms of s 39 of the Magistrates Court Act.

The 1st and 2nd respondents opposed the application, on the grounds that there was no valid appeal before this court.  The decisions of the lower court were interlocutory, pending the determination of the applicant’s application for the eviction of the respondent.  The applicant ought therefore to have set down the application for eviction.

The whole purpose of stay of execution proceedings pending an appeal is to prevent irreparable prejudice from being suffered by the prospective appellant.  In an application of this nature the court must therefore be satisfied that injustice would be caused if stay is not granted. (See Chioza v Independent Property Development (Pvt) Limited and Another HH 76-94 at p3; Murumbechi v Townsend HH 185-90; Cohen v Cohen 1979 (3) SA 420 (R) at 423B-C; Chibanda v King 1983(1) ZLR 116 (H); Santam Insurance Co Ltd v Paget 1981 ZLR 132 (H) and Strime v Strime 1983 (4) SA 850 (C).)

In considering that injustice is not occasioned, the court would also have regard to the prospects of success on appeal, the potentiality of irreparable harm or prejudice to either of the parties and the balance of hardship or inconvenience.

It appears that the applicant has prospects of success in its appeal against the order of 9 February 2012.   The 1st and 2nd respondents could not advance any meaningful defence to the applicant’s contentions that the magistrate issued an order which is final in effect on an ex parte basis.  The order appears to be interlocutory as the restoration of the respondents into the premises was ordered pending the determination of the application for the rescission of the default judgment.   The order is in my view in fact final in effect in that it provides for the ejectment of the applicant from the premises in issue and the reinstatement of the respondents.

My view is premised on the finding in Delco (Pvt) Ltd v Old Mutual Properties & Anor 1998 (2) ZLR 130 (SC)) that once a tenant is evicted from commercial premises through an order of the court, even where the order is wrongful, the tenant cannot regain possession of the premises.  The court’s finding was based on the principle that although an order may later be found to be wrongful, it is lawful and binding at the time of execution if it has not been set aside.  Whilst the court in Delco (Pvt) Ltd v Old Mutual Properties & Anor was considering the provision of s 22(2) as read with s 23 of the Commercial Rent Regulations which protects the right of the statutory tenant in actual physical possession of premises to resist eviction, it is my view that the principle enunciated in that case is equally applicable in the present case.  It appears to me that the applicant would therefore not be able to be restored into the premises if it is ejected pursuant to the decisions of the lower court of 9 and 23 February 2012 which may in fact be found to be wrong on appeal.

Assuming that I am correct in holding that the principles in the Delco case are equally applicable in the present case, it follows that the court erred in restoring the respondents into the premises.  Further, what makes the order of 9 February 2012 patently wrong is that it provided for the ejectment of the applicant in its absence and before the return date.  In UMB Zimbabwe Ltd v The Zimbabwe Independent & Anor 2000(1) ZLR 234(H) at 244H to 245B BARTLET J had this to say:

"I indicated earlier that I would comment on the effect of seeking what amounts to a final order on an ex parte basis.  As stated by GRANGE J in Cleggy v Priestly 1985(3) SA 950(W) at 954F-G it is a "fundamental principle of our law that the court will not make a final order that may prejudice the rights of a person without notice to him: ef Network Video (Pty) Ltd v Universal Studies Inc & Ors 1984(4) SA 379(c). See also Herbstein and van Winsen The Civil Practice of the Supreme Court of South Africa 4ed at p232

Accordingly, if I am correct that the order sought was effectively a final order, the ex parte nature of the application precluded the granting of the order sought-and the applicant would, despite the lateness of the hour and the shortness of the time, have needed to serve the papers on the respondents and given them an opportunity to appear.”

In Nyandoro v Sithole & Ors 1999 (2) ZLR 353(H) at 353H, CHEDA J observed as follows:

“I should say at the onset that it is not proper for a court to grant an ex parte application for eviction without the applicant being heard.  The applicant could only be evicted after the provisional order was confirmed.”

The learned judge further observed at p356G that

“It was also most irregular for the respondent to seek and obtain an order which provided for the eviction of the applicant even before the return day and before the applicant was heard.  The Rules do not permit this.”

Since the order of 9 February 2012 provided for the eviction of the applicant from the premises before it had been given an opportunity to be heard, the lower court erred in my view, in granting the order.  The interim relief was granted on 9 February and the return was 17 February 2012, the order for eviction was granted before the return date.  The lower court, in my view, further erred in that regard.

It appears to me that the applicant may again succeed in its appeal against the order for rescission of 23 February 2012 as the 1st and 2nd respondents might have been in wilful default.  It was not disputed by the respondents that the reason for their default advanced in their application for rescission was that they were not aware of the implications of failing to file a notice of opposition.  The application for their ejectment clearly stated that the applicants were seeking an order for their ejectment.  The respondent’s cannot be heard to be stating that they were not aware of the nature of the application and the consequences of the relief sought being granted.  Despite the clear intention of the applicant, the respondents did not oppose the application neither did they attend court on the date of hearing to establish what was to happen to them.  In my view this amounts to willful default.

The next issue for determination is whether or the lower court also erred in holding in its order of 16 March 2012 that the applicant’s appeal dated 27 February 2012 is invalid.  The applicant asserted that the decision of the court was appealable as it was made in terms of s 39(2) of the Magistrates Act.  Its appeal to the High Court suspended the decision of the lower court and it was not required to seek leave of the court.   The 1st and 2nd respondent maintained that the decision was interlocutory and therefore not appealable as held by the lower court.

S 39 reads:

“39 Rescission and alteration of judgment

(1) 	In civil cases the court may—

(a) rescind or vary any judgment which was granted by it in the absence of the party against whom it was granted;

(b) rescind or vary any judgment granted by it which was void ab origine or was obtained by fraud or by mistake common to the parties;

(c) correct patent errors in any judgment in respect of which no appeal is pending.

(2) 	The powers given in subsection (1) may only be exercised after notice by the applicant to the other party and any exercise of such powers shall be subject to appeal.(own emphasis.)

(3) 	Where an application to rescind, correct or vary a judgment has been made, the court may direct either that the judgment shall be carried into execution or that execution thereof shall be suspended pending the decision upon the application and the direction shall be made upon such terms, if any, as the court may determine as to security for the due performance of any judgment which may be given upon the application.”

The order of 23 February 2012, being an order for the rescission of a judgment granted in the absence of an interested party clearly falls within the ambit of s 39.  Such a judgment is appealable by virtue of ss 2, whether or not the judgment is interlocutory (which I do not believe it is for the reasons advanced earlier).  The lower court therefore erred in holding that the order was not appealable.

What is in issue in my view is whether or not the notice of appeal suspends the operation of order as submitted by the applicant.  The Supreme Court was recently seized with the same issue in Ritenote Printers (Pvt) Ltd v A Adam and Company & Anor SC 15/11.  In that case the court was considering s 40(3) of the Magistrates Court Act, which is similar to s 39(3).   The section provides as follows-

“40	Appeals

…..

…..

Where an appeal has been noted the court may direct either that the judgment shall be carries into execution or that execution thereof shall be suspended pending the decision upon the appeal or application.”

CHIDYAUSIKU CJ had this to say at p4:

“In my view, the wording of s 40(3) of the Act leaves a lot to be desired, but a proper reading of the section reveals that it confers on the magistrate the power to stay execution despite the noting of an appeal.  The section also confers on the magistrate the power to order execution despite the noting of an appeal.  It follows therefore that for the magistrate to exercise the discretion in terms of s 40(3) of the Act, the party seeking to have the discretion exercised in its favour has to make an application.  Upon the making of such application the magistrate exercises the judicial discretion and make a proper determination.”

The applicant in the present case was clearly under the erroneous view that the noting of the appeal suspended the order of the lower court.  It was in fact required to have made an application before the lower court for stay of execution of the order.  However, the fact that it did not do so did not render the appeal a nullity.

In any event, it was not for the lower court to pronounce the appeal before the High Court a nullity.  The appeal is before the High Court and it is only the High Court that can determine whether or not the appeal is a nullity. The rationale for that principle is apparent in Hubert Davies Employees Trust (Pvt) Ltd & Ors v Croco Holdings (Pvt) Ltd 2009 (2) ZLR 53 and the cases therein referred to where the court stated that the higher court can, where notice of appeal is defective for want of compliance with the law, grant on application, an extension of time within which to regularize the notice of appeal. (See also Econet (Pvt) Ltd v Telecel Zimbabwe (Pvt) Ltd 1998 (1) ZLR 149 (HC) A at 153 G and Mydale International Marketing (Pvt) Ltd v Kelly & Anor HH 4-2010 at p4.)

What was before the lower court was an application by the 1st and 2nd respondents (and in my view properly before it) for leave to execute the judgment of 23 February 2012.  The issue before the court was not whether or not its order was appealable.  The court was therefore required to pronounce on the application for leave to execute.  What is in the order would, in my view, be the reasons of the court for arriving at a decision whether or not the respondents had succeeded in their application.

I now turn to the question of the balance of convenience.  It appears to me that the balance in this matter weighs in favour of the applicant.   It is currently in occupation and has sub-leased part of the property to sub-tenants since February 2012.  The applicant is likely to suffer irreparable harm should its appeals succeed when execution has been allowed to proceed.  On the other hand, the 1st and 2nd respondents were evicted and have not been in occupation of the premises since the eviction in February of this year.

In my view, the irregularities highlighted justify the stay of execution pending the outcome of applicant’s appeals.

It is accordingly ordered that:

TERMS OF THE FINAL ORDER SOUGHT

That you show cause why a final order should not be made in the following terms:

The execution of the orders of the Magistrates Court in case No. 255/12 and dated 9 and 23 February 2012 be and are hereby stayed pending the determination of the appeals in the High Court in cases No. CIVA 113/12 and No. CIVA 164/12.

The respondents be and are hereby ordered to costs on a higher scale

INTERIM RELIEF GRANTED

Pending the determination of this matter, the applicant is granted the following relief:

The execution of the orders of the Magistrates Court in case No. 255/12 dated 9 and 23 February 2012 be and are hereby stayed.

Nyikadzino, Simango & Associates, applicants’ legal practitioners.

Matsikidze & Mucheche, 1st & 2nd respondents’ legal practitioners.